How much tax do Italy’s 1,136 super-rich pay?

In Italy, more and more super-rich people are joining the special regime provided by the tax authorities in order to pay less tax. Their numbers have increased over the years and last year there could have been 576 more. The Court of Auditors has analyzed the case, highlighting the figures and highlighting the critical issues. In fact, there are several unknowns linked to the measure, starting from what we know about these “scrooges” to the effects of this special taxation on the state coffers.

Special tax for the super rich: How much they pay to the state

This special taxation is an “optional regime” provided by the Revenue Administration. The system has been in operation since 2018 with the aim of “encouraging investments by non-residents in Italy”. Those who transfer their residence here can actually choose to have their income earned abroad taxed at a flat rate: All you have to do is pay 100,000 euros a year to comply.

This option is also available to family members, who will pay 25,000 euros in return. The payment must be made in a single payment and the duration of the program is a maximum of fifteen years. The number of wealthy people who have access to the optional regime is increasing day by day: according to the latest figures from the Court of Accounts for 2022, there are 1,136 people, 818 of whom are main taxpayers and 318 of whom are family members.

The Revenue Administration responded to 576 new requests for access to special tax in the last year, 2023. As can be seen from the trend in the above graph prepared by Today.it, the numbers are increasing: since the start of the optional regime in 2018, we have reached a potential of over 1,700 from the first 263 people who registered.

In total, around 254 million payments have been reported since 2018, of which 232 were to primary taxpayers and just under 22 to family members. This means that an average of just under 51 million euros enters the state coffers each year. Some aspects do not add up.

Problems with preferential taxation of the richest: what are we missing

For this reason, the number of rich people who move their residence to Italy to benefit from preferential taxation is increasing. But there are problems. In the latest report of the Court of Accounts on the general situation report, the judges underline that the Revenue Administration “does not know the amount of foreign income to which the substitute tax applies, nor the ordinary taxes that should actually be levied on this income in the absence of the substitute regime”.

In practice, the Italian tax authorities do not know their foreign income and therefore do not know how much tax (possibly more) they can charge them compared to the special regime. However, the objection is missing other elements.

The declared purpose of the measure, which allows us to understand why it targets extraordinary incomes, is to “encourage investments by non-residents in Italy”. These could be professional athletes, such as footballers, or people who have moved their residence to Italy for reasons other than work. But the Italian tax authorities do not know whether there is “an effective and concrete link to the realization of productive investments in our country, as should be expected – we read in the Court of Auditors’ analysis”.

Therefore, it is not clear whether preferential taxation is good for the state coffers and the richest, or whether it is an advantage only for the latter.